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  • #21
  • Sep 5, 2006 6:16am Sep 5, 2006 6:16am
Quoting philmcgrew
Most people say that when backtesting gives them an answer they don't want to hear.
Phil is right. There is a lot more to backtesting than most people understand.
You need to know how backtesting works, if particular backtesting method is suited for the strategy that you try to backtest. You need to know how to do it right. And you need to know how to interpret and verify the results.
Backtesting is a powerfull tool if you know how to use it... it can give verry acurate results if done correctly.
In this particular case (because of the simplicity of the strategy), i would say, that Phils backtest results are completly valid.
I'm not insane; my mother had me tested.
  • #22
  • Sep 5, 2006 10:56am Sep 5, 2006 10:56am
Quoting johnedoe
I use a similar strategy...

My parimiters are ....
TP = 3 pip
SL = 25 pip
position size is 90% of available bal.......

this gives me about 1% per day compounded return, and yes the SL has been hit a time or two and it takes some time to regain my losses, but regain them I do......

so for what its worth there it is.......
Just so I understand, you risk 90% of your account on every trade? If your stop gets hit you are left with 10% of your account? What is the accuracy of this system?
  • #23
  • Sep 5, 2006 11:02am Sep 5, 2006 11:02am
I took it as he's using 90% of his margin.

so ie, he's got $1000 and 200:1 margin, thats $18 per point * 25 SL ='s so that'll actuallly lose $450.

then he can trade 2 lots and it'll take a age to get back to $1000.


Ohhhhh sounding very bad that, errrrr NOOOOOOOO
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #24
  • Sep 5, 2006 11:12am Sep 5, 2006 11:12am
turveyd,

That explanation made no sense whatsoever. Maybe we should let him answer for himself.
  • #25
  • Sep 5, 2006 11:25am Sep 5, 2006 11:25am
He'd be margin called out doing that, ( with FXCM anyway ) when his account hit $900.


Like he says, he does get stopped occasionaly, and it hurts but he makes it back, eventually.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #26
  • Sep 5, 2006 10:22pm Sep 5, 2006 10:22pm
Thanks for the back testing data! One thing I did leave out is I trade 4 markets using this method and since I put in the trades 5 pm eastern and leave my computer and don't come back to the next day it is possible to trade both sides. This happened to me yesterday day, where long position was activated on Eur/Dol then the marked just dropped. Hitting my 50 pip stop, continued down hitting the short entry target and actually hitting the 15 pip profit target. So the 50 pip loss was reduced to only 35 pip loss for that currency pair. This situation has happened a few times not sure how back testing that situation would effect the #'s. Mybe I just gotten lucky and it worked in my favor.

I also trade

USD/CHF Winning trade yesterday 15 pip profit
GBP/USD Winning Trade yesterday 15 pip profit
USD/JPY Winning Trade yesterday 15 pip profit

basically ended up the day 8 - 10 pips up.

So far on the days where a market hit me the others hit their target. With 80% + win rate it hits the target often, the winning trades really offset the losers.

I am not real experienced forex trader, did lot of commodities trading lost lot of money, have traded lot of different systems with forext again lost lot of money, using this method I steady winning pips each week so far. I will keep you posted on my end week totals.

Gerald - fullauto
  • #27
  • Sep 5, 2006 11:20pm Sep 5, 2006 11:20pm
Please keep us updated with your system. I am very curious to see how your strategy will do down the road. Good luck!!!
  • #28
  • Sep 6, 2006 12:19am Sep 6, 2006 12:19am
Hi guys......

OK I will try to clear things up RE, the strategy I use.

trade size is 90% of available margin. which =s 16.20 per pip at this time.
as the account balance grows the pip value also grows accordingly.

TP is 3 pip = 48.60, which is just slightly more than 1% return on account balance.

SL is 25 pip =405.00, which is about 8% loss.

limit orders are set at 3:00 PM PDT........time of day for order placement does make a differance

As to hit rate, I am still forward testing, august was not a kind month it hit a couple of the SL. However I am nearly back to breakeven.

the return rate has not been what I had hoped for yet, but august is kind of a weird month....we'll see what Sept. brings.
Same Whore .... Different Dress
  • #29
  • Sep 6, 2006 2:03am Sep 6, 2006 2:03am
Quoting johnedoe
Hi guys......

OK I will try to clear things up RE, the strategy I use.

trade size is 90% of available margin. which =s 16.20 per pip at this time.
as the account balance grows the pip value also grows accordingly.

TP is 3 pip = 48.60, which is just slightly more than 1% return on account balance.

SL is 25 pip =405.00, which is about 8% loss.

limit orders are set at 3:00 PM PDT........time of day for order placement does make a differance

As to hit rate, I am still forward testing, august was not a kind month it hit a couple of the SL. However I am nearly back to breakeven.

the return rate has not been what I had hoped for yet, but august is kind of a weird month....we'll see what Sept. brings.
\

Sounds good, look forward to hearing your results down the road. GL
  • #30
  • Sep 8, 2006 10:52pm Sep 8, 2006 10:52pm
Just wanted to update you on results my daily break out system.

Closed out the week 174 pips in profit.

408 pips profit since starting this thread.

Gerald - fullauto
  • #31
  • Sep 10, 2006 10:22am Sep 10, 2006 10:22am
Quoting philmcgrew
Since your strategy is very simple (some of the great ones are) I coded it up in tradestation and tested it over the last 3 years. I used a 62 pip stop and a 15 pip target with a 2 pip spread. It buys at 5 PM EST at the high + 1 pip or sells at the low -1 pip. If that is not correct, let me know.

The trades are 80.37% accurate but as you can see that is not enough to overcome a rough risk:reward.
nice job phil, nothing like a dose of reality.

phil just demonstrated how to really speed up your learning curve when it comes to mechanical systems. a trader can spend years trying to determine if his system is good, or he can program it and find out in a few hours. years vs. hours.

backtesting also gives you the power of conviction (when you KNOW your system is good you can trade it with confidence) and it gives you a good sense of skepticism (because you already know how poorly certain popular ideas perform, and you know that only 1 in 1000 systems are really winners).

if you are trading mechanically, you MUST be able to do your own backtests. i know this is a bold statement, but i believe it to be absolutely true. the trader without the ability to backtest is a caveman compared to the programmer. if you don't want to learn to code, stick with a discretional, fundamental based approach, because you WILL lose with the mechanical stuff without the ability to code/backtest.

i am a big believer in backtesting as you can see. but i am talking about backtesting that is done the right way. and to understand what i mean by that, you would have to read this...
http://www.forexfactory.com/forexfor...ead.php?t=4446

backtesting the WRONG way can be even worse than no backtesting at all, because you will be constantly tricked into thinking your system predicts the future, when in reality all it does is predict the past.
Relax and be happy.
  • #32
  • Jul 13, 2009 6:48am Jul 13, 2009 6:48am
interesting.,..
  • #33
  • Last Post: Jul 13, 2009 6:55am Jul 13, 2009 6:55am
Woops never mind... Someone played the archeologist (see above)
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